Toronto Stock Exchange Booming U.S. buck sends gold south

Renewed confidence in the U.S. dollar ravaged gold prices which crashed almost $15 to $443.55(US) on the second London fix. The result was a sell-off of most gold equities which pushed the gold and silver index to 6,497.56 pts — off 72.14 pts for the day.

Over-all market performance appears to have deteriorated, with large swings in the composite index recorded throughout the week. The month-long rally appears to be meeting resistance around the 3,450-pt level. Concerns over interest rates and the decline in the gold and silver index, forced the composite down by 5.06 pts to close at 3,430.09 pts.

Gold issues recorded the largest losses. American Barrick Resources gave up 50 cents to close at $25.13. Lac Minerals, which is becoming increasingly burdened by the loss of senior executives at head office, was also easier, slipping to $13.75. Pegged for almost a year as a takeover target, Lac is being looked at by many. American Barrick actually already holds a larger interest in Lac than Lac President Peter Allen. It appears only a matter of time before Lac gets swallowed whole and a new management team gets installed.

A $100-million capital expenditure program by Agnico Eagle Mines and affiliates did little to buck the gold sell-off. Agnico tumbled to $18.25 — off 38 cents for the day.

A battle for Falconbridge Ltd. helped move that issue to $27.75 before settling back to $27.25. Falconbridge itself plans to bid for the 24.5% interest put on the auction block by owner Placer Dome Inc. Noranda Inc. is also planning to make a bid. Noranda was off a quarter to $24.50.

The full impact of booming commodity prices has yet to hit the major nickel, copper and zinc producers. Inco Ltd., which is looking to record earnings this year, was steady at $39.75. Mineral Resources International, which owns the Nanisivik zinc-lead mine in the Arctic, slipped back to $4.35. Shipping of concentrates to Europe has begun and the company hopes to take full advantage of the current record high price for zinc. Earnings, according to analysts, will range from 60 cents -$1 per share this year.

Goldenbell Resources management said that there was no reason for the large price rise in the company’s stock this week. The issue popped 85 cents to $3.05 before sliding back to $2.65 today. Goldenbell holds a large property position in California which hosts a sizeable gold reserve.

NovaGold Inc. was easier at $2.58. A re-assay of drill results from the company’s Summit property in New Mexico provided a pleasant surprise. An 11.9-ft section came in at 0.606 oz gld per ton and a spectacular 77.85 oz of silver. The initial assay was 0.4 oz gold and 63.8 oz silver.

Noramco Mining Corp. dipped a nickel to $3.70 today. Chairman Bruce McDonald told us that it was Noramco which broke off talks with Battle Mountain Gold — not the other way around as was reported here last week. McDonald says that Noramco felt an offer from Breakwater Resources would provide a better corporate fit and ultimately better value for Noramco shareholders. The Breakwater deal saw the latter company take a 19.9% position in Noramco in exchange for Breakwater equity.

A new listing on the TSE today met with roaring success, despite the downturn in bullion. Golden Myra Resources completed a placement of 1.2 million shares at 70 cents per share. The issue then traded more than 250,000 shares to close at $1.09. Myra controls a well- located portfolio of claims in the hot Goudreau area of Ontario. Canamax Resources is building the Kremzar mine just west of one Myra claim block. Canamax likes the area so much that it took down one of the largest blocks of Myra stock today. Also, Frederick Johnston, a Canamax senior officer, is also a Myra director.

Wilanour Resources made a healthy gain to $4.90. Partner Inco Gold is planning a $8-10 million underground exploration program on their joint ventured Red Lake, Ont., property. The claims have the potential to host one million tons grading 0.25 oz.